ML Analysis — SEATTLE CHILDRENS HOSPITAL
CCN 503300 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
66
/ 100 (B)
Financial Health21/25
RCM Upside11/25
Market Position9/20
Demand Defensibility11/15
Operational Efficiency13/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
7.4%
R²=0.34 | n=4,907 | Grade B | Actual: 5.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-20.9%, 35.7%]. P78 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 4864122.929 | +0.4585 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 4586537.969 | -0.3609 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 3806879.680 | +0.0973 | Higher Bed Utilization Value increases predicted m | |
| Reimbursement Quality | 0.361 | -0.0458 | Higher Reimbursement Quality decreases predicted m | |
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin |
Large Academic Medical Ce
Archetype
44.2%
Distress Risk
$1.5M
RCM Opportunity
D
Opportunity Grade
5.8%
Projected Margin
Cluster: Large Academic Medical Center
Percentile within cluster: P82. Large medical centers trade at premium multiples (12-14x). Limited PE value creation but strong cash flow.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| NORTH CAROLINA BAPTIST HOSPITAL | NC | 800 |
| HACKENSACK UNIVERSITY MEDICAL CENTER | NJ | 779 |
| TEMPLE UNIVERSITY HOSPITAL | PA | 761 |
| VCU HEALTH SYSTEM MCV HOSPITAL | VA | 842 |
| UH CLEVELAND MEDICAL CENTER | OH | 660 |
| FROEDTERT MEM. LUTHERAN HOSPT. | WI | 731 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
WA distress rate: 67.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.783 | -0.239 | ▼ risk |
| Revenue Per Bed | 4864122.929 | -0.194 | ▼ risk |
| Medicaid Day Pct | 0.282 | +0.193 | ▲ risk |
| Net To Gross Ratio | 0.507 | +0.062 | ▲ risk |
| Medicare Day Pct | 0.006 | -0.055 | ▼ risk |
| Beds | 350.000 | +0.027 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.5M
Current margin: 5.7%
Projected margin: 5.8%
Grade: D
Comps: 26
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.783 | 0.923 | 14.1% | $929K | 55% | 24mo |
| Payer Mix Optimization | 0.712 | 0.747 | 3.5% | $527K | 50% | 24mo |
Predicted RCM Performance (Public Data Only)
A
RCM Grade
Strong RCM profile — likely low-risk from an operations perspective. Focus diligence on growth thesis.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 2.0% | [2.0%, 25.0%] | P0 | Strong — predicted denial rate is in the top third nationall |
| Days in AR | 25.0 | [25.0, 75.0] | P0 | Strong — predicted days in ar is in the top third nationally |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |